The Justice Department and the CFTC jointly filed lawsuits Thursday against Illinois, Arizona, and Connecticut, coming to the aid of prediction markets in the latest escalation of an ongoing jurisdictional battle over the novel sector.
In the lawsuits, the Trump administration argues the CFTC has exclusive jurisdiction to regulate sports-related wagers on popular prediction market platforms including Polymarket and Kalshi.
In the last year, a growing number of states have sued such platforms, arguing sports-themed prediction markets are not event contracts under the CFTC’s purview—but, instead, unregulated sports betting by another name.
The DOJ and CFTC argued today that by sending cease and desist letters last year to Polymarket, Kalshi, and Crypto.com, state regulators violated a federal law granting the CFTC exclusive authority to regulate event contracts.
“This Court should put an end to the ongoing efforts by Defendants to undermine the uniform application of federal law,” Thursday’s complaint against Illinois, filed in the U.S. District Court for the Northern District of Illinois, reads.
Today’s lawsuits could soon be followed by more, given several other states have issued cease and desist orders to prediction market platforms offering sports-related wagers.
